Nature of Corporate Veil-Piercing and Revitalization of the Evasion Principle

Abstract

Although the UK Supreme Court (UKSC) in Prest v Petrodel Resources Ltd sought to clarify the scope of the common law doctrine of piercing of the corporate veil, there continues to be controversy and uncertainty surrounding the notion of veil-piercing, including continued scepticism on the import of the doctrine, as exemplified by the more recent UKSC decision of Hurstwood Properties (A) Ltd v Rossendale BC). This article aims to provide clarity in this area of the law by: (1) setting out with greater precision the concept of veil-piercing; (2) analysing more closely the meaning and scope of the evasion principle for veil-piercing (and, in the course of doing so, showing that the evasion principle has a greater role to play than is commonly thought post-Prest); and (3) investigating with greater detail how the paradigm cases discussed in the context of veil-piercing can (or cannot) be resolved without veil-piercing (and, in doing so, critiquing the “alter ego” and “concealment” analyses that have been adopted by courts post-Prest).

Keywords: Company law, piercing of corporate veil, evasion principle

JEL Classification: K22